The Obama administration’s strategy of punishing Russia with economic sanctions over the Ukraine crisis encountered a new complication yesterday with word that the Russians are negotiating an $8 billion to $10 billion energy deal with Iran, another country ostracized by U.S.-led sanctions, which partly depend on Moscow’s cooperation to be effective.
The Russia-Iran energy deal, reported by Iranian state media, is the second significant economic collaboration under negotiation between the two countries that could undercut the efficacy of the sanctions on Iran. Those sanctions are widely credited with successfully pressuring the Iranians in the current talks over their disputed nuclear program.
Officials at the U.S. Treasury Department, which enforces economic sanctions against Iran, did not quickly respond to queries about whether the Russia-Iran energy deal would technically violate those sanctions, which prohibit dealings with a range of Iranian government entities and industries and penalize foreigners that subvert them.
Under the deal, as reported by Iran’s Mehr News Agency, the Russians would export 500 megawatts of electricity to Iran and construct new thermal and hydroelectric generating plants and a transmission network. Mehr said terms of the deal were discussed on Sunday between Hamid Chitchian, Iran’s energy minister, and his Russian counterpart, Alexander Novak, who was on a state visit to Iran.
Mehr quoted Chitchian as stressing “the need for further expansion of economic ties between Tehran and Moscow, particularly in the energy and commerce spheres.”
The Obama administration has expressed anger about a previously reported negotiation between Iran and Russia, worth an estimated $20 billion, under which the Iranians would trade 500,000 barrels of oil a day for Russian goods.
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